when a liquidity crisis stemming
from bad mortgage loans brought
financial markets grinding to a
halt, eventually claiming several
victims, the biggest of which was
Lehman Brothers.

The aftermath of that single
event has perhaps been the biggest
driver of the change the buy-side
is now seeing. New rules focused
on reporting of transactions,
storing data securely and greater
limits on bank balance sheets have
markedly changed the way the
world of finance operates. The
light-touch regulation that dominated since the 1980s is now being
pushed back in favour of much
stricter rules that encompass many
more areas, with knock-on effects
on the cost of doing business.

prices kept moving away from
them faster than they could react
due to advanced trading algorithms
deployed by proprietary trading

houses.

The book stirred up considerable
controversy, something which
would be reignited this year when
Katsuyama and Ryan’s IEX trading
venue would go one to achieve exchange status in the US despite the
protestations of big players such as
Bats, NYSE and Nasdaq.

2008

Can just a year be considered a
defining moment? In the case of
that most infamous of years, 2008,
we can make an exception.

The year had already got off to a
shaky start with markets beginning
to stall and numerous concerns
about sub-prime mortgages in the
US and elsewhere. This ultimately
came to a head in September 2008

was the first of many technology
problems to plague the IPO with
many orders not going through and
investors confused as to whether
their order had gone through at all.

Despite an initial rally, the stock
struggled to stay above its IPO
price for the rest of the day and
forced underwriters to buy back
shares. Since the incident, there
have been several other glitches
at Nasdaq and elsewhere leading
regulators telling exchanges to get
a grip on their technology to keep
market outages to a minimum.

Flash Boys

What caused the flash crash? Well
it could just be the people in Michael Lewis’s Flash Boys. This hotly anticipated book was an exposé
of the world of high-frequency
trading something which has been
a crucial concern of the buy-side
since it first came about with the
advent of electronic trading.

The book follows several sto-rylines but centres around the
activities of Brad Katsuyama and
Ronan Ryan (both of which are
interviewed in detail this issue on
page 44). The pair both noticed
there was a problem with markets
because genuine investors were

INFLUENTIAL PEOPLE
“The book stirred up considerable controversy,
something which would be reignited this year
when Katsuyama and Ryan’s IEX trading venue
would go one to achieve exchange status in
the US.”

Alasdair Haynes

Alasdair Haynes, the former chief
executive officer of Chi-X Europe
- established in 2007 - was behind
the pan-European exchange’s
growth into the largest equities
trading platform in the region.

Under his leadership, the exchangebecame profitable in just four yearsand was sold to Bats Global Mar-kets for $300 million in 2011.

Following the transaction,
Haynes departed Chi-X to form his
own alternative trading system in

2013, which was in direct compe-tition with Chi-X and other largeexchanges. Aquis Exchange hitheadlines in 2016 when it madedramatic changes to its executionrules in what was consideredby many, a controversial move.Haynes had decided to ban propri-etary traders from using ‘aggres-sive’ techniques to attain execu-tion, although they could becomemembers of the exchange if theyagreed to be totally passive.